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China steps up pressure on tech with draft online ad rules -Breaking

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© Reuters. FILEPHOTO: In this illustration taken on July 12, 2017, a computer network cable can be seen over a Chinese flag. REUTERS/Thomas White/Illustration

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SHANGHAI (Reuters). China’s market regulator introduced new rules Friday to increase oversight of online advertising. They include stipulating adverts must not disrupt normal internet browsing or lead users astray.

China’s authorities have increased regulation in a variety of sectors this year with a particular emphasis on technology.

Baidu Inc, the search giant for information (NASDAQ:), and Tencent Holdings (OTC;) both warned in recent quarter-end results that short-term prospects for advertising sales were weak due to the Chinese pandemic.

According to the State Administration for Market Regulation, internet advertising must comply with the conditions for the establishment and promotion of socialist spiritual civilizations.

These rules require platform operators to set up a system for reviewing and registering advertisers and ads, monitor and inspect content displayed or published through its information services and allow them to “monitor” and inspect it.

Proposed rules include bans on advertising targeting minors that promotes cosmetics, medical treatment and online games.

According to the regulator’s website, public comment is allowed on proposed new rules until Dec. 25.

After the publication of draft rules, shares in Hong Kong’s Tencent stock exchange and Meituan delivery company fell by 0.5% and 1.1%, respectively.

China’s cyberspace regulator released draft rules in September that outlined how businesses can make algorithmic recommendations. These rules were a follow-up to earlier regulations relating to unfair competition and data use.

Didi Chuxing, a Chinese ride-hailing company, was subject to an investigation for privacy violations just days after its listing in the United States. E-commerce giant Amazon had already been investigated. Alibaba Group Holding Ltd, (NYSE:) was hit with a $2.8 Billion record for its anticompetitive conduct.

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